Banking on Customer-Centric Culture Change

Financial experts examine the drivers behind the urgent need for enterprisewide innovation and offer five changes to implement this year.

To remain competitive, all industries must evolve alongside the consumer in order to continuously satisfy changing demands. But, within the financial services space, innovation and culture change aren't always up to par with customer expectations and preferences, as federal guidelines and security measures limit basic institutional flexibility and infrastructural improvement.

While the nature of the industry's environment hinders rapid change, Alex Jakobson, managing director, North America at rogenSi, emphasizes that financial institutions must actively work to reestablish strong customer relationships. Trust remains the cornerstone for enterprisewide success, but strict regulations often stand between bankers and their customers, for these rules prevent them from doing what they enjoy most-focusing on their customers and their products.

David M. Wallace, global financial services marketing manager at SAS, indicates that most financial brands face three major challenges on the road to enterprisewide innovation:

Omnichannel Service-From in-person branch interactions, to mobile applications, the financial services industry now faces the dilemma of developing innovative experiences across numerous contact channels, adding to the complexity of the task at hand.

Regulatory Compliance-Because financial firms must adhere to strict guidelines, banks often find it difficult to sustain innovation, as every decision must align with the federal rules designed to maintain data security and consumer safety at all times.

Legacy Technology-Many core banking applications date back 30 to 40 years, meaning most data warehouses are no longer compatible with today's demands. Thus, these outmoded tools make it extremely difficult to achieve a 360-degree customer view

Despite these challenges, the financial services industry must change its underlying culture and embrace new ways to generate behaviors consistent with the values of their institutions. Here are five changes to implement today to see greater value tomorrow.

Overcome Traditional Infrastructure

Financial institutions must also work to overcome their historically traditional infrastructure. Rob Heiser, CEO of Segmint, explains that, typically, financial firms feature deeply entrenched silos and little internal collaboration, making integration and innovation challenging. However, collaboration and integration of shared resources will allow employees-from executives to tellers-to better understand their customers and adapt strategies accordingly. Thus, many financial institutions are looking to alter their approaches in an effort to connect with today's digital audience on their own terms.

Adjust to the Age of the Informed Customer

In today's competitive ecosystem, financial companies must adjust to the age of the informed consumer. Prospects and clients have more information available to them in more formats and across more channels than ever before, says Lewie Miller, CEO of Qvidian. They even have improved insights into what those in their social sphere, such as friends and family, prefer. Therefore, they rarely engage in blind conversation with sales representatives, as they come bearing knowledge about the product or service they desire. Consumers seek convenient, personalized customer service and targeted, relevant product information, meaning financial brands must reinvent their engagement strategies to maintain customer loyalty, protect potential future sales, and improve internal morale and productivity throughout the organization.

Foster Innovation

Preston Thornton, senior director, product management at Inlet, notes that, at its core, innovation has always been about taking risks-an idea that frequently comes into conflict with the DNA of the financial services industry. Financial institutions go to great lengths to minimize risks and ensure safety, ultimately making it difficult to find the right balance between innovation and the demands of this highly regulated industry. Unfortunately, banks operate within an industry that demonstrates very little differentiation between the products and services of one institution and its competitors, putting greater emphasis on differentiation via price and customer service. Thus, this competitive dynamic has created an industry culture where innovation isn't nurtured quite as much as others. But, as priorities begin to shift, financial firms understand that serious change can only take hold from the top down.

"Evolving company culture is never a simple task," Thornton adds. "There's always going to be some level of fear of the unknown. Senior management ultimately has to set the tone by being completely brought in to the future direction. They must also demonstrate that the evolution in culture ultimately puts customers first, which will have lasting benefits for the organization and all stakeholders."

Prioritize Customers' Core Values

Financial institutions must, above all else, prioritize their customers' core values. Relationships rely upon trust. Therefore, all subsequent innovations must focus on preserving this fundamental element for long-term success. Yet, despite the fact that financial brand employees demonstrate great passion when it comes to helping customers, existing systems, tools, and policies impede their ability to fulfill service requests. This customer-centric culture, however, empowers staff to do what's best for the consumer at all times. Desktop analytics solutions and scorecards also enable employees to assess how their actions impact operational success overall.

"Access to data-driven performance metrics and visibility into how each employee or team contributes to the business can help build a culture of personal accountability and drive customer engagement," says Jenni Palocsik, director of solutions marketing at Verint. "Employees feel empowered and believe they will be evaluated fairly, and become more vested and engaged. Highly engaged employees are motivated to provide high-quality customer service, and customers are more engaged as a result."

Customers often struggle with their bank's inability to pull information from old records or display current balances in real time. But those financial institutions that find fewer ways to say "I'm sorry" will foster their customer-centric culture, Thornton highlights, ultimately attracting consumers that will stay longer, save more, willingly pay more fees, and tell others about their experience.

Use Real-Life Technologies

But, as financial firms begin to redefine their internal culture, they must recognize that, just as these new technologies are no longer confined to their younger audience, this digital transition also has no age limit within the organization. Lamont Exeter, partner at Peppers & Rogers Group, notes that companies should employ the technology its employees and consumers are using in real life. Originally, such methods were crucial for engaging their younger workforce, but as digital behaviors become more widespread, financial firms must also look to their leadership teams. While some of these individuals will need to prepare for this new mindset and culture change, most have already adopted these very technologies within their daily lives, making the progression easier and smoother for the organization overall.